The Art of Motivating Your Employees Without Raising Salaries

Did you know that employees that are happy at work are 12% more productive? (source: Snacknation). Satisfied and engaged employees tend to invest more in their work, which reflects in their productivity. But this may leave you wondering how to motivate your employees. Raising salaries is not the only way!

In 2010, renowned psychologist Daniel Kahneman and economist Angus Deaton demonstrated that an individual’s well-being increases when their salary is re-evaluated, until they’ve reached a certain threshold ($75,000 USD per year). Once this compensation level has been surpassed, financial incentives no longer have an impact on employee satisfaction.

Why is this good news? Now you know that raises are not the only solution!

Here are eight ways to motivate and retain employees that you can put into action without breaking your budget.


1. Prioritize flexible working hours


Why impose a 9-to-5 schedule on your employees? Young workers are looking for flexibility. The possibility of choosing their hours or telecommuting plays a part in their selection of a company to work for.

A study by Global Workplace Analytics shows that 36% of employees would choose telecommuting over a salary increase if the choice was given to them. Nevertheless, in Quebec, only 16% of companies with 50 employees or fewer allow their employees to work from home. Generations Y and Z will represent 75% of active workers in the world by 2025 (source: a Deloitte and Brookings Institute study).

Leaders, it is time to give your employees flexibility and take part in the transition towards telecommuting!

2. Get rid of strict dress codes


Although certain studies have shown that relaxed dress may lead to laxity at work, Google, known for its relaxed dress code, has been rated the best place to work in the US (source: Fortune).

As previously mentioned, members of the new generation of workers have different criteria than their elders when it comes to choosing a workplace. Keep in mind that 15% of 18-25 year olds consider their workplace’s dress code to be too strict.

3. Encourage professional development


In a 2015 study by the Society for Human Resource management, 83% of employees surveyed said that advancing their career is important or very important to them. Only 20% of them were satisfied by the way their company was managing their ambitions.

As a leader, try and communicate with your employees to understand their career objectives, and offer them development tools like coaching, training and mentoring.

Nonetheless, giving career advice to employees who don’t have any opportunities within your business will only push them to leave. Make sure your employees are aware of the ways they can evolve with you. Such a strategy will improve employee retention at your company.

4. Develop team spirit


According to a TinyPulse study, employee relations are highly correlated with employee satisfaction. The relationship between colleagues is significantly more important than the employee-employer relationship.  A study by the American Psychological Association shows that 1 out of 2 employees cites their colleagues as a reason not to quit their job.

It is therefore critical for businesses to create a positive work environment so that exchanges between colleagues can take place. You would be surprised how much implementing an internal chat system, organizing a happy hour or setting up a relaxation room can transform the atmosphere of your business! A good first step is creating a social committee to be in charge of organizing events.


5. Thank them and celebrate them


Did you know that recognition is considered one of the primary influences on workplace well-being? It’s too bad that 7 out of 10 employees do not feel recognized for what they do at work (source: Deloitte). Employees today are considered nothing more than “human resources”. However, human beings in all their complexity cannot be treated like other forms of capital. People are the key to business performance, and require particular attention. According to a Gallup study, employees who are regularly praised and rewarded:

  • Integrate more with their colleagues
  • Increase their productivity
  • Stay with the business longer

As a leader, take the time to congratulate and thank your employees personally. You can even display “employees of the month” on a wall, or put into place a prize to reward high performers. An employee who is rewarded for their work will be better equipped to face future challenges. Don’t underestimate the power of recognition on employee motivation and retention!

Don’t hesitate to connect with your employees in order to develop a real sense of team spirit. Teambuilding activities have been proven to be effective in increasing collaboration within companies, as they reveal the strengths of each individual and mobilize team members towards a common goal. For employees, a tightly-knit team leads to a reassuring, positive work environment which is conducive to creativity, innovation and business performance*.

* Relationships between colleagues and employee satisfaction have a correlation coefficient of 0.916 (on a scale between -1 and 1).


6. Create a positive work environment


A positive work environment will improve employee retention rates. Take the example of Netflix and Virgin: both companies removed their employees’ vacation quotas, so the employees can now take vacation whenever they want! Richard Branson declared: “Treat people as human beings, give them that flexibility and I don’t think they’ll abuse it. And they’ll get the job done”.

Even simpler, think about including plants in your workspace, make sure that the level of light is sufficient and let your employees listen to music at work. In a British study, 77% of businesses surveyed considered music to be effective in raising in employee morale and thus, indirectly increasing their productivity.


7. Prioritize transparency and honesty


According to the aforementioned Tiny Pulse study, levels of managerial transparency and employee satisfaction are strongly correlated*. Leaders, try to diffuse as much information as you can within your business. By doing otherwise, you risk losing your employees’ trust and damaging your workplace culture. The absence of concrete information also encourages the spreading of rumours which can be more damaging than the actual situation. Increasing transparency within your business is an effective and cost-efficient way to motivate your employees and to increase employee retention.

You should also consider including your employees in strategic decisions whenever possible, so that they feel connected to your business’ objectives and are motivated to take action to attain them. Remember that engaged employees are more productive!

* Managerial transparency and employee satisfaction have a correlation coefficient of 0.937 (on a scale between -1 and 1).

8. See access to Facebook in a positive light


Although the use of personal sites like Facebook at work is often seen as a distraction by employers, prohibiting access may be a mistake. According to Keas Health Management, a 15-minute Facebook break has a positive effect on employee performance. Letting your employees access the sites that they want proves that you trust them and naturally discourages abuse.

When it comes to motivating your employees, one thing is sure: every employee is unique and it is difficult to make everyone happy. Act pragmatically by experimenting with new measures and, above all, talking with employees to understand their opinions and get suggestions for improvement.